This Sacramento estate planning legal blog has provided a number of posts on the various kinds of trusts that Californians may wish to create as they consider how their wealth and assets should be distributed upon their deaths. While many estate planners wish to leave their families and friends the money and goods they have amassed over the course of their lives others also wish to make charitable contributions to organizations that are important to them. The creation of charitable trusts can serve this purpose and this post will address some of the basics on these specialized trust tools.
There two types of charitable trusts that estate planners can create - charitable lead trusts (CLT) and charitable remainder trusts (CRT). When a CLT is created the charity or charities of the creators choosing receive income from the trust for an established number of years. When the period of years ends a named beneficiary that is not a charity receives the benefits of a trust.
When a CRT is created the trust is established for the benefit of a non-charitable beneficiary and serves that individual through their lifetime. The charity ultimately serves as the trustee of the trust and when the non-charitable beneficiary passes away the charity takes the remainder of the assets contained in the trust.
Both types of charitable trusts can serve the interests of estate planners but those who are interested in learning more about them are encouraged to discuss their desires with estate planning attorneys. Different forms of trust may have different tax benefits and there are other significant considerations that should be made before estate planners commit to these unbreakable testamentary devices.